CH-1-4 Evolution of Human Resource Management and Human Resource Information Systems The Role of Information Technology – Human Resource Information Systems: Basics, Applications, and Future Directions : Chapter Notes

● This Document Contains Chapters 1 to 4 Lecture Outline Chapter 1: Evolution of Human Resource Management and Human Resource Information Systems: The Role of Information Technology CHAPTER OBJECTIVES After completing this chapter, you should be able to do the following: Describe the historical evolution of HRM, including the changing role of the human resources (HR) professional Discuss the impact of the development of computer technology on the evolution of HRM and HRIS Describe the three types of HR activities Explain the purpose and nature of an HRIS as well as the differences between the types of information systems functionality in an HRIS Discuss how the information from an HRIS can assist in decision making in organizations Discuss how the developments in HRIS have led to HRM becoming a strategic partner in organizations and to the emergence of the field of strategic human resources management (Strategic HRM) Be able to define Six Sigma, balanced scorecard, and the contingency perspective and fit model of HRM Describe the differences between e-HRM and HRIS Understand how HRM and HRIS fit within a comprehensive model of organizational functioning INTRODUCTION To maintain a competitive advantage in the marketplace, firms need to balance the resources available to the firm to achieve the desired results of profitability and survival. The resources that are available to the firm fall into three general categories: financial, physical, and human. The management of the human resources is the most critical of the three due to the costs of human capital for the firm. The effective management of human resources in a firm to gain a competitive advantage in the marketplace requires timely and accurate information on current employees and potential employees in the labor market. The need for timely and accurate information for managerial decision making must be stressed with the students early in the course. Finally, as will be seen throughout the book, the evolution of computer technology, meeting this information requirement (timely and accurate) has been greatly enhanced through the creation of HRIS. Historical Evolution of HRM and HRIS The evolution of HRM and the development of HRIS are important for the student in that the caretaker/record-keeping function prior to World War II still is important in today’s elaborate systems. The advancement of the field of HRIS is tightly intertwined with the developments in the IT/IS field in that as more data and information could be stored and accessed, HR professionals could move away from primarily clerical work to work that was closely related to the strategic objectives of the firm. See new Figure 1. 1 – Historical Evolution of HRM and HRIS. HRM in the pre–World War II period HRM in the pre–World War II period was only focused on keeping employee records(having a “caretaker” role), and there were very few government rules or regulations governing the treatment of people in the workplace. During this period, the prevailing management philosophy was called scientific management. The central thrust of scientific management was to maximize employee productivity. It was thought that there was one best way to do any work, and this best way was determined through time and motion studies that investigated the most efficient use of human capabilities in the production process. Then, the work could be divided into pieces, and the number of tasks to be completed by a worker during an average workday could be computed. At this point in history, there were very few government influences in employment relations; consequently, employment terms, practices, and conditions were left to the owners of the firm. As a result, abuses such as child labor and unsafe working conditions were common. Post–World War II (1945–1960) In the post–World War II era, managers realized that employee productivity and motivation had a significant impact on the profitability of the firm. The human relations movement after the war emphasized that employees were motivated not just by money but also by social and psychological factors, such as recognition of work achievements and work norms. There were significant numbers of employment laws enacted in the United States that allowed the establishment of labor unions and defined their scope in relationship with management. Due to the need for the classification of large numbers of individuals in military service during the war, systematic efforts began to classify workers around occupational categories in order to improve recruitment and selection procedures. The central aspect of these classification systems was the job description, which listed the tasks, duties, and responsibilities of any individual who held the job in question. These job description classification systems could also be used to design appropriate compensation programs, evaluate individual employee performance, and provide a basis for termination. With its changing and expanding role, the typical personnel department started keeping increasing numbers and types of employee records, and computer technology began to emerge as a possible way to store and retrieve employee information. In some cases in the defense industry, job analysis and classification data were inputted into computers to better understand, plan, and use employee skills against needs. Personnel departments outside the defense industry were not using computers at this time. Computers were being used for billing and inventory control, but there was very little use for them in the personnel function except for payroll. The payroll function was the first to be automated. Large firms began harvesting the benefits of new computer technology to keep track of employee compensation, but this function was usually outsourced to vendors since it was still extremely expensive for a firm to acquire or develop the necessary software for the payroll function. Social Issues Era (1963–1980) In the “social issues” era, there was an unprecedented increase in the amount of labor legislation that governed various parts of the employment relationship, such as prohibition of discriminatory practices, occupational health and safety, retirement benefits, and tax regulation. As a result, the personnel department was burdened with the additional responsibility of legislative compliance that required collection, analysis, and reporting of voluminous data to statutory authorities. It was about this time that personnel departments were beginning to be called human resources departments, and the field of human resource management was born. Computer technology was evolving and delivering better productivity at lower costs. These technology developments and increased vendor activity led to the development of a comprehensive management information system (MIS). Another factor was the booming economy in most industrialized countries. As a result, employee trade unions successfully bargained for better employment terms, such as health care and retirement benefits. Consequently, labor costs increased, which put pressure on personnel managers to justify cost increases against productivity improvements. With the increased emphasis on employee participation and empowerment, the role of personnel function transformed from a “protector” rather than a “caretaker” focus, shifting the focus away from maintenance to development of employees. Thus, the breadth and depth of HRM functions expanded, bringing about the need for strategic thinking and better delivery of HR services. Cost-Effectiveness Era (1980 to the Early 1990s) In the “cost-effectiveness” era, the functional focus shifted from employee administration to employee development and involvement. To improve effectiveness and efficiency in service delivery, through cost reduction and value-added services, the HR departments came under pressure to harness technology that was becoming cheaper and more powerful. There was a growing realization within management that people costs were a very significant part of their budgets. Some companies estimated that personnel costs were as high as 80% of their operating costs. As a result, there was a growing demand on the HRM function to cost justify their employee programs and services. Even small and medium firms could afford computer-based HR systems that were run by increasingly user-friendly microcomputers and could be shown to be cost-effective. The prevailing management thinking regarding the use of computers in HR was not that their use would result in a reduction in the number of employees needed in HR departments but that employee activities and time could be shifted from transactional record keeping to more transformational activities that would add value to the organization. With the growing importance and recognition of people and people management in contemporary organizations, strategic human resource management (Strategic HRM) has become critically important in management thinking and practice. Firms today realize that innovative and creative employees who hold the key to organizational knowledge provide a sustainable competitive advantage because unlike other resources, intellectual capital is difficult to imitate by competitors. One of the keys to effective management of the human talent was the computerization of the HRM function. The increased use of technology and the changed focus of the HRM function as adding value to the organization’s product or service led to the emergence of the HR department as a strategic partner. Technological Advancement Era and the Emergence of Strategic HRM (1990 to Present) The economic landscape underwent radical changes throughout the 1990s with increasing globalization, technological breakthroughs (particularly Internet-enabled Web services), and hypercompetition. Business process reengineering exercises became more common and frequent, resulting in several initiatives, such as the rightsizing of employee numbers, reducing the layers of management, reducing the bureaucracy of organizational structures, creating autonomous work teams, and outsourcing. These changes to both human resources and the systems supporting HR are summarized in Figure 1. 1. Firms today realize that innovative and creative employees who hold the key to organizational knowledge provide a sustainable competitive advantage because, unlike other resources, intellectual capital is difficult for competitors to imitate. Accordingly, the people management function has become strategic in its importance and outlook and is geared to attract, retain, and engage talent. These developments have led to the creation of the HR balanced scorecard, as well as to added emphasis on the return on investment (ROI) of the HR function and its programs. The increased use of technology and the changed focus of the HRM function, which shifted to adding value to the organization’s product or service, led to the emergence of the HR department as a strategic partner. With the growing importance and recognition of people and people management in contemporary organizations, strategic human resource management (Strategic HRM) has become critically important in management thinking and practice. The evolution of strategic HRM: 7 key themes: HR contingency perspective and fit: HR strategies are dependent on business strategies (cost reduction, quality improvement, and innovation) and business settings (manufacturing, services, public sector, and not for profit, as well as firm size) Shift in focus from managing people to creating strategic contributions, signifying the resource-based view of the firm and social capital HR system components and structure, focusing on HR system architecture and bundles of high-performance work practices Expanding the scope of HRM beyond the focal organization to include customers, suppliers, and competitors, both locally and internationally Achieving HR implementation and execution by translating the rhetoric into practice Measuring the outcomes of Strategic HRM by various means, such as the HR balanced scorecard approach Research methodological issues that stress the importance of evidence-based management Another critical characteristic of Strategic HRM is the adoption and use of HR metrics. Most functional departments of an organization have utilized metrics for decades due to the nature of their business transactions. For example, the marketing department has set sales goals, and the effectiveness metric that is used is the percentage of sales relative to the goal. But for HR, the focus on the measurement of the cost effectiveness of programs is relatively recent. Kaplan and Norton (1996) first popularized the concept of the balanced scorecard that goes beyond traditional financial measures to assess firm performance to include customer, internal process, and learning perspectives. The HR Balanced Scorecard seeks to achieve the key HR deliverables (workforce mindset, technical knowledge, and workforce behavior) by aligning, integrating, and differentiating the HR systems. In addition, Lawler, Levenson, and Boudreau (2004) emphasize that three types of metrics are important to evaluate the HR function. One is efficiency metrics for administrative tasks such as “time to fill” jobs. The second type is effectiveness metrics for HR practices such as the cost to fill a job vacancy. The third type is impact metrics for HR programs and practices that focus on the overall objective of developing and optimizing workforce capabilities and competencies. For example, an organization could assess the cost per hire, comparing current year cost relative to the costs in previous years or after a major change to recruitment practices. HR metrics combined with IT knowledge and applications has given organizations a significant tool to utilize the human capital in their organizations. HR Activities HR departments engage in three types of activities, as follows: Transactional HR activities involve day-to-day transactions that have to deal mostly with record keeping—for example, entering payroll information, employee status changes, and the administration of employee benefits – 65% to 75% of the time. Traditional HR activities involve HR programs such as planning, recruiting, selection, training, compensation, and performance management – 15% to 30% of the time. Transformational HR activities are those actions of an organization that “add value” to the consumption of the firm’s product or service. An example of a transformational HR activity would be a training program for retail clerks to improve customer service behavior, which has been identified as a strategic goal for the organization– 5% to 15% of the time. One of the main purposes of an HRIS is to reduce the amount of time spent on transactional activities and shift that time for HR professionals to use for traditional and transformational activities. In terms of the broad roles of HR, Ulrich (1998) identifies four main roles—namely, strategic business partner, administrative expert, employee champion, and change agent. Ulrich, Younger, and Brockbank (2008) stress that, in the 21st century, the HR organization should function as a business within a business, shifting its focus from activities to outcomes and capabilities and its structure so that it mirrors that of the business. This is a major theme of the entire book. Implementing an HRIS will not reduce the number of employees needed to fulfill the HR function; however, the HRIS will allow them to work on activities that can have effects on the “bottom line” and the achievement of the strategic objectives of the company. Interface Between HR and Technology Technology-driven automation (IT) and the redesign of work processes certainly help reduce costs and cycle times, as well as improve quality. Information systems (IS) can further help decision makers to make and implement strategic decisions. However, IT is only a tool and can only complement, not substitute for, the people who use it. Often, organizations mistake IT as a message and not the messenger, so they divert time, effort, and money away from a long-term investment in people to developing and deploying information technologies. In fact, the critical success factors in information systems project implementation are often nontechnical and due more to political, social and managerial issues rather than technical issues (Martinsons & Chong, 1999). This topic is covered in detail in Chapters 8 and 9. A Primer on HRIS It is important to note that a company that does not have a computerized system still has an HRM system; that is, the paper system used to acquire, store, manipulate, analyze, retrieve, and distribute information regarding an organization’s human resources. An HRIS is not simply computer hardware and associated HR-related software. Although an HRIS includes hardware and software, it also includes people forms, policies and procedures, and data. The primary purpose of the HRIS is to provide service, in the form of accurate and timely information, to the “clients” of the system. There are a variety of potential clients, as HR information may be used for strategic, tactical, and operational decision making (e. g. , planning for needed employees in a merger); to avoid litigation (e. g. , identifying discrimination problems in hiring); to evaluate programs, policies, or practices (e. g. , evaluating the effectiveness of a training program); and to support daily operations (e. g. , helping managers monitor the work time and attendance of their employees). Because of the complexity and data intensiveness of the HRM function, it is one of the last management functions to be targeted for automation (Bussler & Davis, 2001/2002). This fact does not mean that an HRIS is not important; it just indicates the difficulty of developing and implementing it compared with other business functions—for example, the billing and accounting systems. Powered by information systems and the Internet, almost every process in every function of HRM has been computerized today This idea of an HRIS impacting the entire organization is very important, and you should emphasize it strongly. However, the additional idea is that systems do not make the decisions but people do. At this point it is important to introduce the idea that HR folks design the systems, and IT/IS simply supply the technology. E-HRM & HRIS Confusion can arise concerning the distinction between e-HRM and HRIS. Electronic human resource management, or e-HRM, reflects a philosophy for the delivery of HR; it uses information technology, particularly the Web, as the central component of delivering efficient and effective HR services. Conversely, as conceptualized in this book, an HRIS comprises the technology and processes underlying this new way of conducting human resource management. An HRIS can include technologies such as databases, small functional systems focused on a single HR application (e. g. , performance management), or a large-scale, integrated enterprise resources planning (ERP) architecture and Web-based applications. In today’s environment, it can even be devices such as smartphones and social networking sites that enable employees to access HR data remotely or to connect with others in the organization. Another way of looking at the differences between e-HRM and HRIS is that e-HRM tends to be more application and HR-function focused (e. g. , e-recruitment and e-training), and an HRIS is more focused on the systems and technology underlying the design and acquisition of systems supporting the move to e-HRM. Why Do We Need HRIS? There are several advantages to firms in using HRIS. They include the following: Providing a comprehensive information picture as a single, comprehensive database; this enables organizations to provide structural connectivity across units and activities and increase the speed of information transactions Increasing competitiveness by improving HR operations and improving management processes Collecting appropriate data and converting them to information and knowledge for improved timeliness and quality of decision making Producing a greater number and variety of accurate and real-time HR-related reports Streamlining and enhancing the efficiency and effectiveness of HR administrative functions Shifting the focus of HR from the processing of transactions to strategic HRM Reengineering HR processes and functions Improving employee satisfaction by delivering HR services more quickly and accurately to them The ability of firms to harness the potential of HRIS depends on a variety of factors, such as the size of the organization, with large firms generally reaping greater benefits; the amount of top-management support and commitment; the availability of resources (time, money, and personnel); the HR philosophy of the company, as well as its vision, organizational culture, structure, and systems; managerial competence in cross-functional decision making, employee involvement, and coaching; and the ability and motivation of employees in adopting change, such as increased automation across and between functions. Different Types of HRIS Although there are multiple typologies for the classification of computer-based systems, we are going to define the most basic types of systems that are most readily applied to the HR context and for use within an HRIS. Although there are many ways of categorizing information systems, one of the most common ways of doing this is to focus on what level of organization processing the system supports: daily operations, managerial functioning, executive-level processes and strategies, and those that span organization levels. Table 1. 1 lists the major types of information systems and their major focus and goals, as well as providing examples of how they can be used to support human resources. We briefly focus more deeply on one type of information system, the decision support systems (DSS). A DSS focuses on decision making, enabling users to work intimately with the data, developing multiple “what if” scenarios and queries with the system. Although there are numerous reports that can be generated by a DSS on a regular basis, the critical question is this: How many of these reports are used by either line managers or HR professionals in their daily work, particularly in their decision-making capacity? Transaction Processing System Improved transaction speed and accuracy Improved efficiency in the processing of daily business transactions Automation of routine transactions Reduced transaction costs Management Information System Provides key data to managers Supports regular and ongoing decisions Provides defined and adhoc reporting Executive Information System Provides aggregate, high-level data Helps managers with long-range planning Supports strategic direction and decisions Decision Support System Interactive and iterative managerial decision-making Supports forecasting and “what-if” analysis Supports business simulations Expert System Embed human knowledge into information systems Automate decisions with technology Office Automation Systems Designing documents Scheduling shared resources Communication Collaboration Technologies Supports electronic communication and collaboration between employees Supports virtual teams Enterprise Resources Planning System Integration and centralization of corporate data Share data across functional boundaries Single data source and common technology architecture System Development Process for an HRIS The formal design of any information processing system is supposed to follow a set of steps labeled the System Development Life Cycle (SDLC). There is agreement that the SDLC has five general phases: (1) planning, (2) analysis, (3) design, (4) implementation, and (5) maintenance. However, it is recommended that the following system development process should be used for an HRIS: The HRIS development process refers to the steps taken from the time a company considers computerizing its human resources functions through the analysis, design, development, implementation, maintenance, evaluations, and improvement of the system. Walker (1982) indicated that development of an effective HRIS should follow seven stages: Proposal to Management, Needs Analysis, System Specifications, System Design, System Development, Installation and Conversion, and Evaluation. Note: The important point is that the SDLC for an HRIS should follow a structured approach, and this book will cover that approach in detail. There are two critical points to be emphasized from the various descriptions of the phases or stages of system development. One, the HRIS system development process begins when the company first begins to consider computerizing its HR functions. It is important to document this beginning of the process so that it can be considered when the system is being evaluated and maintained. The second critical point is the importance of theevaluation and, as needed, improvements to the system. A Model of Organizational Functioning There are PowerPoint slides for this model. The focus of the model is on the centrality of the effects of the HRIS on the Strategic Management Plan, as well on operational implications in terms of specific HR programs. Central Themes of the Book There are some central themes that are emphasized in this book, which can also be seen in the model of organizational functioning. These are the major factors that influence the effective operation of the organization through their effects on managerial decisions. In addition, they directly affect the success of both the HRM programs and the use of the HRIS. These factors are as follows: 1. The effective alignment between the strategy of the firm, the HR strategy, and HR programs 2. The importance of tying HRMprograms to IT applications and databases 3. The importance of legal considerations in all HR programs and functions 4. The need for a cooperative relationship between HR and IT professionals 5. The critical need for the creation and use of HR metrics to both guide decision making and evaluate the cost effectiveness of the HR strategy and programs All of the chapters of this book will contain some reference to some or all these factors, and their effects will be discussed in detail in the chapters. Lecture Outline Chapter 2: Database Concepts and Applications in HRIS CHAPTER OBJECTIVES After completing this chapter, you should be able to do the following: Discuss the differences between data, information, and knowledge Identify problems with early database structures Understand what a relational database is and why it is better than older database structures Discuss three types of data sharing and why they are important Know where data in a database are stored Know the different ways in which data can be delivered to the end user Know what a query is and discuss three different types of queries Discuss how queries are used to support decision making Discuss the key steps involved in designing a simple database in Microsoft (MS) Access INTRODUCTION Data are produced, stored, updated, and used by HR employees and managers on a daily basis. Effective collection, storage, and use of data are essential for any business, and the most successful organizations are masters of this process! Many believe that managing data and turning data into information is a competency necessary to succeed in today’s marketplace. Today’s HRIS consist of business applications that work in conjunction with an electronic database. Together, these software programs transform data into information that is essential for business operations and for decision making. Relational database terminology is described, how a database is structured, and how to develop a basic database using MS Access, a basic database management system (DBMS), as an example. A DBMS provides the capability to integrate HR data and to link these data with other data essential to the operations of a business. Data, Information, and Knowledge Data represent the “facts” of transactions that occur on a daily basis. A transaction can be thought of as an event of consequence, such as hiring a new employee for a particular position for a specified salary. Information, on the other hand, is the interpretation of these data. An interpretation of data always has some goal and context, such as making a hiring decision for a particular department or understanding the performance of the company to make an improvement. Knowledge is different from data and information. While information refers to data that have been given structure, knowledge is information that has been given meaning (Whitehill, 1997). For example, in HRIS, facts about age, gender, and education are the data. When these data are transformed into average age, gender ratio, and number and types of graduates at the unit level, they become information. More than what and why, knowledge is about how. It is procedural and mostly hidden in the minds of individuals and groups in the organization. In the HR function, data about employees and jobs are the foundation of most of the information that is critical to analyzing and making HR decisions. Knowledge constitutes knowing what information is needed from a database and how to use it to achieve HR objectives. Database Management Systems A database management system (DBMS) is a set of software applications (i. e. , computer programs) combined with a database. These systems allow organizations to effectively manage data electronically. DBMS turn data into an organizational resource. The main functions of a DBMS are to create the database; insert, read, update, and delete database data; maintain data integrity (i. e. , making sure that the data are correct) and security (i. e. , making sure that only the right people have access to the data); and prevent data from being lost by providing backup and recovery capabilities. As a central repository of data, a database is a valuable organizational asset and therefore needs to be managed appropriately. DBMS and databases work in conjunction with business applications, such as transaction processing systems, to make organizations run smoothly. As shown in Figure 2. 1, these business applications consist of a set of one or more computer programs that serve as an intermediary between the user and the DBMS while providing the “functions” or “tasks” that the user wants performed (e. g. , store data about the new hire) (Kroenke, 2003). The business application must communicate in an easy-to-use manner with the user sitting at a computer terminal while maintaining efficient database processing. Early DBMS were simply data-processing systems that performed record-keeping functions that mimicked existing manual procedures. The main objective of these file-processing systems was to process transactions such as updating payroll records and the production of payroll checks as efficiently as possible. These traditional file-oriented data structures had a number of shortcomings, however, including (1) data redundancy—an employee’s name and address could be stored in many different files; (2) poor data control—if you had access to the file you had access to all the data in the file, which may not be desirable if the organization wanted to restrict the data viewed by a particular user; (3) inadequate data manipulation capabilities—it was very difficult to combine the data across files and to update and add new data easily; and (4) excessive programming effort—any change in the data required extensive changes in the programming that accessed the data. To overcome the shortcoming of file-oriented structures, hierarchical and network database systems evolved in the mid-1960s and early 1970s. The key to these systems were that relationships between different records were explicitly maintained. Only the very knowledgeable technical staff were able to interact with the database effectively. Relational DBMS The advent of relational database management systems addressed the many problems associated with these older DBMS and database structures. In 1970, E. F. Codd introduced the notion that rather than programming relationships between data based on physical location, the information needed to integrate data should reside within the data (Hansen & Hansen, 1996). In relational database systems, retrieval of data was based on logical relationships built into the table structures, which made feasible the creation of a query capability that was much more accessible to end users, who generally had limited programming experience. Perhaps, the most significant difference between a file-based system and a relational database system is that data are easily shared. There are three types of data sharing: (1) data sharing between functional units, (2) data sharing between management levels, and (3) data sharing across geographically dispersed locations. Data sharing requires a major change in end-user thinking. Fundamentally, sharing data means sharing power because both data and information are power. Sharing data also means being a good citizen and making certain that the data you enter are correct. Data Sharing Between Different Functions Relational DBMS facilitate data integration across different functions. As a result, relational database technology increased the feasibility and popularity of integrated business applications. These integrated applications used in large organizations are referred to as enterprise resource planning (ERP) business applications. Data Sharing Between Different Levels Operational employees, managers, and executives also share data but have different objectives and, thus, different information needs. These three different levels of use correspond to three different types of software systems that have evolved over the past three decades: transaction processing systems (TPS), management reporting systems (MRS), and decision support systems (DSS) (Hansen & Hansen, 1996). Note the similarity between the categorization of software systems and the classification of information systems into electronic data processing (EDP), management information systems (MIS), and decision support systems (DSS), which were discussed in Chapter 1 (Sprague & Carlson, 1982). These terms correspond to TPS, MRS, and DSS in this chapter. The HRDSS could be classified as a special instance of an MRS or MIS system but focused specifically on information used in decision making—a central theme of this book. In addition to TPS capabilities, relational databases can also provide MRS capability. DSS assist senior managers and business professionals in making business decisions. Data mining, data analytics, and business intelligence (BI) are examples of information derived from a DSS, which relies on data warehouses. Data warehouses represent aggregated data collected from various databases available to a business. Data Sharing Across Locations In today’s global environment, access to data from any physical location in the world is increasingly important. Computer networks are created that provide instant access to these operational data, allowing real-time managerial decision capability regardless of physical location. A centralized database allows a company to confine its data to a single location and therefore more easily control data integrity, updating, backup, query, and control access to the database. A company with many locations and telecommuters, however, must develop a communications infrastructure to facilitate data sharing over a wide geographical area. The advent of the Internet and a standardized communication protocol made the centralized database structures and geographically dispersed data sharing feasible. Key Relational Database Terminology Entities and Attributes Entities are things such as employees, jobs, promotion transactions, positions in the company, and so on. It includes both physical things, such as desks, and conceptual things, such as bank accounts. A company must analyze its business operations and identify all of the entities that it believes are important. Each of these entities is made up of attributes. An attribute is a characteristic of the entity. For example, an employee has a name, address, phone number, education, and so on. In addition to the entities and attributes, the relationships among the entities must be identified and defined. Tables Tables are used to store information about entities. Each table in a database contains rows. Rows are also referred to as records and represent an “instance” of the entity. Relationships, Primary Keys, and Foreign Keys In a relational DBMS, relationships are created by having the same attribute in each table with the value of the attribute being the same in each table. Most often this is done by taking the primary key of one table and including it in the related table. When a primary key from one table is stored as an attribute of another table, that attribute is called a foreign key. Queries A query is a question that you ask about the data stored in a database. Queries retrieve specific data in a particular order, but it is important to note that queries do not store data! All data are stored in tables. Queries only report on data currently in the table. There are three different kinds of queries: select queries, action queries, and cross-tab queries. A select query allows you to ask a question based on one or more tables in a database. This is the most commonly used query. An action query performs an action on the table on which it is based. Actions include updating data in the table (e. g. , increasing the base salary of all employees who were rated above average in the latest performance rating), deleting records from the table (e. g. , removing employees from the employees table if they no longer work at the company), or inserting records (e. g. , adding a new set of benefits to the benefits table). A cross-tab query performs calculations on the values in a field and displays the results in a datasheet. The reason it is called cross-tab is that it tabulates the data for a set of descriptor attributes, contrasting them or crossing them in a table format. Select queries and cross-tab queries provide the information that managers and executives expect from IT. These queries can serve as the foundation for MRS and DSS information and decision making. Action queries, on the other hand, improve the operational efficiency of managing and maintaining a database. These tasks are important to the operational staff but of less interest to HR managers and executives. Queries are also used as the basis for forms and reports. In addition to retrieving data, they can add, update, and delete records in tables. You can define fields in a query that perform calculations, such as sums and averages. The following list summarizes the typical capabilities of queries: Display selected fields and records from a table Sort records on one or multiple fields Perform calculations Generate data for forms, reports, and other queries Update data in the tables of a database Find and display data from two or more tables Create new tables Delete records in a table based on one or more criteria Forms A form is an object in a database that you can use to maintain, view, and print records in a database in a more “structured” manner. Although you can perform these same functions with tables and queries, forms can present data in many customized and useful ways. A report is a formatted presentation of data from a table, multiple tables, or queries that is created as a printout or to be viewed on screen. Although you can print data appearing in tables, queries, and forms, reports provide you with the greatest flexibility for formatting printed output. Reports A report is a formatted presentation of data from a table, multiple tables, or queries that is created as a printout or to be viewed on screen. Data displayed in a report are dynamic, reflecting the latest data from the tables on which the report is based. Unlike forms, however, you cannot change the data or add a new record in a report. You can only view the data in a report. Although you can print data appearing in tables, queries, and forms, reports provide you with the greatest flexibility for formatting printed output. As with forms, you can design your own reports or use a Report Wizard to create reports automatically. Introduction to MS Access MS Access differs from other commercial database management software such as Oracle, DB2, or MYSQL in that it integrates both database application and DBMS software into one. MS Access is a relational DBMS in which data are organized as a collection of tables. MS Access is designed for relatively small databases and assumes limited knowledge of database programming. The design process for an MS Access Database begins with an analysis of the data and information that the users of the database will need to have stored and retrieved in order to accomplish their work. In general, the database design process can be broken down into several steps that are somewhat sequential but oftentimes have to be repeated until the database meets the users’ needs. (Refer to the text for a list of steps. ) HR Database Application Using MS Access For small companies, generally with less than 1, 000 employees, there are commercially available HR database applications based on MS Access. One such system, popular in the United States, is HRSource™ from Auxillium West (www. auxillium. com). Other HR databases A few decades ago, database application programs were often written by companies for their particular use; in today’s business environment, customized application programs, termed legacy systems, are being replaced by commercially developed database application programs (e. g. , PeopleSoft Enterprise HCM, mySAP ERP HCM, Lawson HCM, Epicor HCM, SuccessFactors Employee Central, UltiPro HR, and Workday). Although the list in Table 2. 1 appears to be comprehensive, in fact, it is quite sparse when compared with listings of HR fields within more complex database applications. More complex database applications will also have fields that relate to business processes other than HR. Data Integration: Data Warehouse, Business Intelligence, and Data Mining An organization’s ability to generate meaningful information to make good decisions is only as good as its underlying database. Metrics are various measures of organizational performance that are derived from organizational data. The overarching objective of HR metrics is to improve organizational efficiency and effectiveness. Much of the data now available to create HR metrics come from an organization’s data warehouse. A data warehouse is a special type of database that is optimized for reporting and analysis and is the raw material for management’s decision support system. Business intelligence (BI) is a broad category of business applications and technologies for creating data warehouses and for analyzing and providing access to these specialized data to help enterprise users make better business decisions. Essentially, BI systems retrieve specified data from multiple databases, including old legacy file database systems, and store these data in a new database, which becomes that data warehouse. The data in the data warehouse can then be accessed via queries and used to uncover patterns and diagnose problems. Patterns in large data sets are identified through data mining, which involves statistically analyzing large data sets to identify recurring relationships. BI systems also provide reporting tools and interfaces (e. g. , forms) that distribute the information to Excel spreadsheets, Internet-based portals, PDF files, or hard copies. These results can also be distributed to key executives in specialized formats known as executive dashboards, which are becoming a popular executive-decision support tool. A major reason for a DBMS is to provide information from various parts of the organization in an “ad hoc” manner. Data warehouses and BI software enable managers to create information from an even greater store of data. Big Data and NOSQL Big Data is a term that illustrates the challenges faced by organizations. It is described using four dimensions: volume, variety, velocity and veracity. Volume refers to the amount of data, often measured in terabytes that organizations collect today. Variety refers to the different forms of data. Velocity refers to the speed at which data is coming into the organization. Veracity refers to the quality of the data collected by the organizations. NOSQL are databases where data are stored and retrieved using different methods than SQL. CHAPTER SUMMARY In this chapter, we have described the key aspects of current DBMS technologies and how these systems work to create, store, and manage critical data about an organization. Data are transformed into information by relational DBMS and business applications that work together. The underlying data in a database are collected from business transactions and stored in tables that are related to each other through shared fields called primary and foreign keys. Queries represent questions asked of the data and are used to access specific data stored in tables. The results of queries can be viewed in forms or reports that are customized so that the end user can better interpret the data that are retrieved from the database. More sophisticated data analyses and reports, such as executive dashboards, are produced from specialized databases called data warehouses and using business application software called BI software. Most HRIS rely on an underlying database. Understanding how database systems work, therefore, is relevant to HR decision makers because knowledge about how to create, store, and access data can be a key differentiator in a competitive environment. Small HR databases can be created using MS Access, or more sophisticated ones can be purchased from software vendors. There are literally hundreds of HR database business applications that create process and analyze HR data. The challenge is to find one that can most cost-effectively collect and share data from which meaningful information can be extracted to support making good decisions. Lecture Outline Chapter 3: Systems Considerations in the Design of a Human Resource Information System: Planning for Implementations CHAPTER OBJECTIVES After completing this chapter, you should be able to do the following: Understand the different types of users or customers of the implemented HRIS and their different data needs Discuss the differences between the five general hardware architectures that are presented, from “dinosaur” to “cloud computing” Discuss, very generally, the main concepts of hardware and database security Discuss the “best of breed” approach to HRIS acquisition and the various options available for each functional area of HR Develop an understanding of the general steps and factors that affect system implementation Understand the pros and cons of implementing a changeover from one software system to another INTRODUCTION Successful implementation is the central goal of every HRIS project, and it begins with a comprehensive design for the system. Only by understanding the users or customers of the HRIS, the technical possibilities, the software solution parameters, and the systems implementation process can we increase the probability that the completed software installation will adequately meet the needs of the human resources management (HRM) function and the organization. System implementation success is the result of careful planning, a dedicated team, top-management support, and an awareness of potential pitfalls. The implementation process provides a host of opportunities to reengineer and systematically improve nonsoftware processes to reflect best practices in HRM. This chapter asks the student to keep in mind these four points: It is important to keep in mind the customer of the data, the process, and the decisions that will be made. Everything about HRM is a system of processes designed to support the achievement of strategic organizational goals. The HRIS, in turn, supports and helps manage these HR processes. An HRIS implementation done poorly will result in an HRIS that fails to meet the needs of the HR function. Successful implementation requires careful attention to every step in the system design process. However, done well, the implementation process is full of opportunities to improve the organization and processes. More consistent processes will contribute to enhanced organizational performance. HRIS Customers/Users: Data Importance Individuals who will be using the HRIS can be split into two general groups: employees and nonemployees. Employees Managers. The managers referred to within this section may have a variety of titles: manager, director, vice president, and even CEO. Their primary HRIS need is to have real-time access to accurate data that facilitate decision making with regard to their people (Miller, 1998). The HRIS provides the manager with data for performance management, recruiting and retention, team management, project management, and employee development (Fein, 2001). The HRIS must also provide the information necessary to help the functional manager make decisions that will contribute to the achievement of the unit’s strategic goals and objectives (Hendrickson, 2003). Many HRIS products provide real-time reporting and even screen-based historical information that can provide the manager with information about their employees or their functional unit. The analysis of more complex situations is beyond the capabilities of many of these reporting and query tools. To facilitate decision making on complex issues, the manager, before making a decision, usually relies on the analyst or power user to complete some type of analysis. Analyst (Power User). The analyst or power user is perhaps the most demanding user of the HRIS. The primary role of the analyst is to acquire as much relevant data as possible, examine it, and provide reasonable alternatives with appropriate supporting information to facilitate the decision process of the manager. The analyst is referred to as a power user because this person accesses more areas of the HRIS than almost any other user. Some HRIS also provide tools that the analyst can use to model scenarios or perform “what-if” analyses on questions of interest. Technician (HRIS Expert). HRIS experts straddle the boundary of two functions. Their role is to ensure that appropriate HR members have all the access, information, and tools necessary to do their jobs. HRIS experts do this by understanding what is needed from an HRprocess standpoint and then interpreting that into technical language so the technical employees—programmers, database administrators, and application administrators—know exactly what to do. When the technical staff is planning to install the latest update and one of the results will be a change in functionality, the HRIS expert must take what the technical staff provides and interpret that into language HR users understand, so as to indicate how processes and activities might change. Clerical Employee. Much like power users, these employees also spend a significant portion of their day interacting with the HRIS. The difference is that of depth. The clerical employee must understand the process required to enter information into the HRIS and may also need to start the process or generate periodic reports. Clerical staff in the HR employment department bear considerable responsibility for seeing that the new employee gets paid properly. Organizational Employees All the employees in the organization may interface with the HRIS through a self-service Web portal or secure employee kiosk, removing the necessity of an HR clerk or staff member assisting with many routine HR record modifications (Walker, 2001). Self-service capabilities encourage employees to manage their personal HR profiles with respect to a variety of functions, such as benefit and retirement plan monitoring or computerized training, in addition to using HRIS-based systems to complete numerous personnel forms (Adamson & Zampetti, 2001; Zampetti &Adamson, 2001). Typical self-service applications are accessible most of the day throughout the week. Employees log on to the system, where their identity is authenticated and verified. Then, appropriate change options are offered to the employee based on certain parameters that control the areas where the employee is allowed to make valid alterations to the HRIS—such as personnel data updates, job postings, or desired training enrollments Nonemployees Job Seekers. Online recruiting tends to attract individuals who are well educated, Internet savvy, and searching for higher-level positions (McManus & Ferguson, 2003). A successful recruitment website needs to be user-friendly and easy to navigatewhile attracting candidates to apply to an organization by clearly communicating the benefits of joining it. The Web form that is used to collect applicant data must also be reliably entered into the appropriate fields within the company’s HRIS database. Sourcing Partner Organizations. The sourcing partner organizations to HR functions require certain information to complete their tasks. Business partners that are the recipients of decisions to outsource portions of the HR function (e. g. , benefit management firms) or that facilitate process completion on behalf of the employee (e. g. , banks) require information that is related to current employees. Important Data Each discussed customer or user of the HRIS has slightly different needs with regard to what information he or she will be using. Specific data from the HRIS database fit into three categories: 1. Information about people, such as biographical information and competencies (knowledge, skills, abilities, and other factors) 2. Information about the organization, such as jobs, positions, job specifications, organizational structure, compensation, employee/labor relations, and legally required data 3. Data that are created as a result of the interaction of the first two categories, for example, individual job history, performance appraisals, and compensation information HRIS Architecture The HRIS Dinosaur The HRIS “Dinosaur. ”In the early days of HR applications (in the 1970s), large “dinosaurs” roamed the IT landscape. Although access to the mainframe could be done via a desktop monitor, no processing was done locally. This architecture is commonly called a single-tier computing system—user interface, application processing, and data storage resided on the mainframe. Client-Server (Two-Tier) Architecture Two-Tier Architecture (Client-Server). During the 1980s, it was discovered that many typical HR functions (such as employee benefits and recruiting) did not require the high-powered and expensive processing available on the mainframe computers. With the advent of the personal computer (PC), many of these functions could be reallocated to the local processing power of the PC. By the end of the decade, HRIS software vendors such as PeopleSoft began using this power of PCs and created the two-tier (client-server) architecture (see Figure 3. 1). The purpose of client-server architecture was to spread out low-powered processing capability to the dozens of PCs then being used across an organization. High-performance applications such as payroll would still be run in a batch process on the mainframe computer or outsourced to vendors such as automated data processing (ADP). The ease of using the GUI compared with the traditional command-based interface was a major factor that enabled individuals with limited technology experience to use these PC-based applications. This two-tiered architecture meant that the HR software application technology could be divorced from the database technology. This separation simplified the HR application and allowed enterprises to select the most appropriate database management system (DBMS) for their needs. The HR software application technology could be divorced from the database technology. This separation simplified the HR application and allowed an enterprise to select the most appropriate database management system (DBMS) for their needs. The most common database design is the relational model. This model standardizes how data is physically stored on the computer and provides standard data access via the Structured Query Language (SQL). Most software products are able to communicate to a variety of DBMS Servers. Utilizing a standard called open database connectivity (ODBC), applications became database servers. This two-tier architecture was a huge leap forward in exposing HR to serve many more employees—data was still located in a centralized database, but logic could be distributed to the PC that needed to run the specific application, and usability increased! Three-Tier Architecture Three-Tier Architecture. Throughout the 1990s and into the current decade, this division of processing activity expanded from two-tier to three-tier and, finally, to N-tier architectures. With a three-tier architecture, the servers have two roles—as a database (DBMS) server and as an application server (see Figure 3. 2). With the development of the two-tier and three-tier systems, the HRIS professional still managed the user interface, but more demanding processing occurred in the middle, in the tier comprising the application server or servers. This type of software, which performed tasks between the client and the database server, became known as middleware—software that managed data and transactions before they were saved to the database. There are a couple of drawbacks with both two-tier and three-tier systems, however. First, a large amount of information has to move from the client computer across the network to the server to execute database transactions quickly, which necessitates the use of significant bandwidth or the ability to move lots of data quickly between computers. Second, the user interface client needs to be installed (along with database drivers) on every PC needing to access the HRIS. The corollary issue of this requirement is that employees need to be trained on this application. To overcome some of these shortcomings and to support broader employee access to employee self-service applications (or portals)(ESS), organizations utilized the Web browser. The browser provides a “thin client” and is a relatively small piece of software requiring fairly small client computing resources made possible by the three-tier computing model. A “thick client” would require a significant-sized software product and computing power at the client location (as necessitated by the two-tier model). N-Tier Architecture N-Tier Architecture. Instead of just limiting ourselves to a four-tier label, this architecture has been labeled N-tier for the following reasons: It is expandable to multiple Web servers and application servers to handle load balancing. Web servers can be geographically dispersed to provide worldwide access. Additional file servers can be added to save documents, reports, error logs, and so on that are generated on a daily basis. Multiple print servers or specialized printers can be added as needed. Additional “process schedulers” can be added to handle large-batch jobs, such as payroll cycles. These servers offload “heavy” processing from the main application server so that user interaction is not affected. N-Tier Architecture with Enterprise Resource Planning. The architecture diagram becomes even more complicated when other ERP components are added. HRIS do not exist in a vacuum. They interact with other business operations within the company. For example, when payroll is run, these financial-related transactions need to be registered in the company’s general ledger (GL) application. Typically, GL exists within the financial/accounting component of large ERP systems from SAP, Oracle, and Microsoft. Therefore, GL transactions must be interfaced between payroll and these systems. So additional application servers and databases enter the picture, depicted in Figure 3. 3. There exist many variations on this diagram. In some cases, databases can be shared (in this situation, HRIS is subsumed within the enterprise resource planning [ERP] system); in other cases, Internet technologies, such as XML and Web services, are used to integrated HRIS and ERP. The ultimate goal is to provide a single data truth so that all enterprise data can be accessed by users (employees, partners, suppliers, and managers) wherever and whenever needed. Data should not be duplicated, re-entered, or copied to multiple systems. ERP applications provide the infrastructure to avoid this problem. So even though the architecture may be more complicated, the logical view of the system remains relatively simple and this complexity is hidden from the end user. For example, a consultant for a large IT services company can travel throughout the world, work with multiple clients, but still be able to record their time and expense reports with a single browser application from any hotel room. Cloud Computing—Back to the Future!? Cloud computing is a computing architecture that uses the Internet and central remote servers to maintain data and applications. To achieve this, a “server cloud, ” or group of computers, is operated off-site, and hosted services are then delivered over the Internet to the client organization. Cloud computing technology allows businesses to use applications without actually having to own the hardware and software. The underlying goal of cloud computing is to reduce software and equipment capital outlays. Cloud computing technology allows businesses to use applications without having to go through the complex installation process. It is notable that the cloud in “cloud computing” was inspired by the cloud symbol that one uses to represent the Internet in flow charts and diagrams. Cloud computing can be sold on demand, by the minute or the hour, and is elastic— meaning that an enterprise can consume as much or as little of a service as it wants at any given time. There exist three general service categories commonly recognized in cloud computing. These include infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS). In a sense, cloud computing is a return to the single-tier model of the 1980s. Instead of a single large mainframe running all of the applications, the various servers together act as the “supercomputer” providing the application runtime environment over the Internet. In the ancient history of mainframe applications, human resource departments had to rely upon corporate data centers (or IBM) to provide high-performing and up-to-date applications. With cloud computing, the burden lies with software vendors such as Workday or Oracle’s Taleo (www. taleo. com, hosted recruiting and talent management solution) to provide the updating. And of course, leveraging the cloud requires solid high-performance Internet access all of the time. Finally, the cloud service providers now maintain sensitive corporate data. So when choosing a cloud solution, the evaluation process must include a thorough security analysis. Security Challenges Security ranks as a top priority for any HRIS. Security needs to be addressed to handle many different situations (e. g. , exposure of sensitive payroll and benefits data among employees or loss of sensitive personnel data outside the enterprise [such as the Social Security number]). Security needs to be maintained at a variety of levels. First, physical access to the DBMS and the application server needs to be limited so that machines cannot be destroyed or logged into directly. Network, operating system, and DBMS access must be limited so that tools outside the HR application cannot be used to query sensitive data. This control should prohibit hackers directing probes at the systems or using a variety of techniques to gain access. In the case of external users, special network access may need to be set up. A virtual private network (VPN) can be implemented so that users outside the company can log into the computing resources as if they were within the firewall. Alternatively, many HRIS applications provide specially built “portals” that enable Internet browser access to specific components of the system. This leads to the segregation of users into different security categories. All enterprise-level HRIS implement their own level of security on top of those of the operating system and DBMS. Security can limit or allow to each user role through column- and row-level security. Within the typical corporation, the HR function exists primarily as support for the operational components of the corporation (sales, marketing, procurement, and manufacturing). In the same way, human resource information systems support the general ERP system operations. Best of Breed An HRIS, as discussed in the previous section, exists as one of the main parts of an overall ERP software solution for the company. There exist alternative software applications that solve specific HR business problems. In general, an architecture that combines products from multiple vendors is called best of breed (BOB). The goal is to deliver the best possible point solution to meet the business need. There should be a perceived need for a specialized solution. A universally agreed-on set of guidelines for interoperability must exist between applications. This exists at both the syntactical and the semantic levels. Syntactical refers to the base “alphabet” used to describe an interface. For any two applications to communicate, they will need to share data. Applications need to “speak the same language. ” Just as the Roman alphabet allows the spelling of words in multiple languages and formats, XML enables data to be described with many different tags. At the semantic level, the language needs to map between software applications. If the above conditions are met, HRIS applications should be able to interoperate with many point solutions. Examples of best-of-breed solutions for some of the HR functions are as follows: Recruitment. The business process to recruit new employees for a company has many BOB opportunities. Large HRIS applications tend to focus on the internal hiring processes of the company—creating and approving job requisitions, saving applicant data, scheduling interviews, capturing interview results, and, finally, hiring the new employee. Yet there exist other software applications to “fine tune” the hiring process. Time Collection. Most companies require employees to submit time-keeping data each pay period. For hourly employees, this typically means using a punch card and time clock to track hours. Some solutions use employee badges with magnetic stripes, thereby enabling employees to clock in and out. Again, most HRIS vendors do not provide the hardware needed to track time. Time-keeping systems will capture the hourly data from various readers throughout a site. Payroll. In some cases, the entire payroll process may be out sourced to another vendor, such as ADP. This choice of using an outside provider is conceptually the reverse of the typical BOB motivation. The enterprise is not looking for the best technical or functional solution but for a provider offering a commodity service at the lowest cost. In the case of a large multinational corporation with lots of employee levels, it would probably be prudent to purchase the HRIS payroll application. Benefits. Each year, most employers present their employees with what is called the benefits open enrollment period. These providers support interfaces with the major HRIS applications so that as employees log into the enrollment software, they can review offerings tailored to their company’s plan. Thus, when employees selecta particular insurance program, they can then transmit enrollment data to the provider through their organization’s HRIS. BOB solutions introduce additional complexity into the software architecture. A cost–benefit analysis should be performed by the HR function to determine whether the BOB alternative is to be used. In summary, BOB options can create a much more powerful solution than a stand-alone HRIS. The BOB alternative also creates system flexibility, as each application can be managed and upgraded independently. Yet this power and flexibility may end up costing the IT department by giving rise to more complex systems administration issues. See Figure 3. 4 – Best of Breed Solutions Architecture in the Text Planning for System Implementation Points to remember as this section is examined are as follows: (1) this is a process that will take a team of individuals anywhere from 6 weeks to 3 years to complete; (2) a variety of ways to manage this process may be attempted, so long as the key issues are examined and organizational goals for the implementation are achieved; and (3) there is no single definitive approach to be used in all situations. The first key step is planning. This is an absolutely critical step in any business process and especially in the design of any large-scale software implementation involving multiple-process interfaces. Note that the planning process doesn’t guarantee success—rather, it increases the probability that the implementation will be successful. Topics and roles to be addressed in the planning process include the following: Project Manager. The choice of project manager deserves some serious thought. There are really three good options for project manager: hire a consultant to be the project manager, hire a full-time project manager who has presumably been certified by the project management institute, or select someone who is involved in the project and temporarily move him or her into a project management role. Steering Committee/Project Charter. While project managers are responsible for the project, they are often assisted with the planning and implementation process by a team of individuals known as the steering committee. The steering committee has three key purposes. First, this group works under the direction of the project manager to establish the project scope, which is then often codified through the development of a project charter document. A second role of the steering committee is to develop a change management plan. The third major role of the steering committee is to assist the project manager in decision making. Project Charter: The steering committee may develop a document known as the project charter, which will help maintain the guidelines on how the project should function. The project charter helps keep the entire team focused on the goals for the project by forcing the team to agree on what is critical. The project charter can also serve as a valuable political document within the organization, as some members of top management are usually asked to participate in developing the charter through an approval process or by helping draft the document. Finally, the charter provides all of the team members with key “talking points” about the project so that the scope, process, and goals can be clearly and consistently shared with those who might have questions. Implementation Team: The implementation team works with the project manager to complete the actual software implementation. A good configuration for the implementation team includes both functional and technical personnel. Functional personnel are usually drawn from the ranks of the HR department in the form of HR professionals with some technological proficiency. These functional experts are most often the power users. Technical personnel include HRIS specialists, systems analysts, database administrators, and hardware experts. As soon as the implementation team is chosen, two steps need to be taken quickly. First, the functional team experts should begin process mapping (see below). Second, implementation team training provided by the software vendor should be identified and scheduled by the project manager for the implementation team to attend. Project scope is defined as those portions of the information system that need to be completely operational to satisfy the needs of the various customers, employees, and senior management. This definition of the scope of the project is absolutely critical to success. Project creep occurs when decisions are made to implement additional functionality beyond what was defined in the project scope. The problem with project creep is that it may lead to huge cost overruns, a failure to complete the project on schedule, and then, in the rush to meet final deadlines, the delivery of a project that fails to meet the needs of the customers. Management sponsorship of the implementation project is crucial. Senior management has the ability to add or remove budget dollars and other resources as needed, move political hurdles out of the way, and facilitate the change management process through publicly demonstrated support for the project. Process mapping is the systematic documentation of organizational processes that directly relate to the ongoing project. To facilitate that change, the team must understand an existing process before starting any implementation. The first step is to generate one list of all of the processes performed by each area of the HR function and a second list of processes that are touched by more than one area of the HR function. The second step is to start generating a model of each process within the entire HR function. A successful model will incorporate both a flowchart picture and a dataflow model (i. e. , what data elements, processes, and outputs go with each step of the process). The completed process maps are ideally compiled into a large chart that provides an overall view of the organization’s processes. The details of the processes can be stored electronically in an easy-to-access central storage location, and it is useful to have copies in binders that can be distributed during the software implementation and configuration process. Software Implementation: Once the planning process is reasonably complete, the process-mapping process is nearly complete, and the implementation team has received most of its training, the actual software implementation can begin. This software implementation involves eight steps. Some of the steps go on concurrently while some work in sequence. Data migration and configuration or fit-gap processes should also be ongoing. Any gaps that are identified need to be closed either through modification of organizational processes or by software customization. The last step of the software implementation is system testing. In most cases, extensive testing is done while data are migrated to verify data integrity. Data integrity means that the information is stored where it should be, that it can be queried, and that it is available to individuals with appropriate security clearance. The technical software team members test each module for proper functionality, and the functional HR team members verify that the module functions and maintains data integrity. Throughout the entire implementation process, documentation of each action and decision must be recorded. This will provide the ongoing maintenance team with the roadmap to follow while they work on each new update, patch, security adjustment, or biannual legal change. Customization: One of the most difficult decisions that many steering committees face is whether to customize—especially since modern HR software comes with ample opportunity and excellent tools for customization. The main downside to customization is that there will be significant maintenance costs, as every tiny change has to be customized all over again with each software upgrade. With no customization, the version of the software to be implemented is referred to as the “vanilla” version. The advantage of a vanilla implementation is that it provides a catalyst for the organization to engage in process reengineering in order to develop best practices that will match the industry best practices around which the software was developed. The downside is that the cost of change management efforts will increase. A good method to determine which modifications need to be done is to have the steering committee request a complete business case, including a cost–benefit analysis, from the person requesting the customization. Change management focuses on the most difficult part of the implementation process—the interaction between the user and the software. The introduction of this new system will typically encounter strong resistance from the employees. Failure to develop a change management plan may lead to morale issues, fear, and potential turnover among the workforce. “Go Live!” There are two possible ways that the new software can be put to use. Option 1 is to do a direct conversion; the old software is turned off, and the new software is turned on. The second option is a parallel conversion. This option turns the new software on some period of time before the old software is to be turned off, and it incorporates final system testing into the changeover process. Regardless of which option is chosen, it is absolutely critical that appropriate support for training and software be in place. Project Evaluation. Every project provides an opportunity to learn something about what might have been done better. A specific schedule of measurement or identification of milestones and related reporting should be created during the planning process and adhered to rigorously. Potential Pitfalls Some of the most common pitfalls occur in the above steps: Poor planning Incomplete steering committee or steering committee without top-management support Implementation team problems or incomplete implementation team Failure to assess the politics of the organization adequately Insufficient process mapping Scope creep Poor implementation of or insufficient change management Lecture Outline Chapter 4: The Systems Development Life Cycle and HRIS Needs Analysis CHAPTER OBJECTIVES The learning goals for this chapter are listed below. At the end of this chapter, you should be able to address the following questions: Define the systems development life cycle (SDLC) Explain how the analysis phase of the SDLC informs the needs analysis process Describe the purpose of needs analysis and why it is important Outline the main stages of needs analysis Identify what is involved in an HRIS needs analysis, including the types of activities performed List the typical participants involved in an HRIS needs analysis State the key deliverables of an HRIS needs analysis INTRODUCTION Needs analysis refers to the process of thoroughly gathering, prioritizing, and documenting an organization’s HR information requirements and serves as a necessary input for the subsequent design and implementation of an HRIS. An HRIS needs analysis usually takes on a particularly prominent role in the planning and analysis stages of an HRIS system development project, prior to significant design and implementation activities. The needs analysis for the HRIS continues through the entire system development process since each stage in the process could lead to the identification of new needs for the HRIS. Some of the potential costs of not planning and conducting a thorough needs analysis are these: Users reject an HRIS that fails to provide the functionality they need. Vendor software packages are selected based on incomplete, inaccurate, or irrelevant criteria. Costly custom systems are developed and built based on arbitrary data. Custom additions to the HRIS are required to fill needs after implementation, as these needs were not properly identified during the needs analysis. Scope creep: Growth in the goals, functionality, and requirements of the HRIS without adjustments to the time, cost, or resources allocated to the project. System Development Life Cycle (SDLC) Scholars and practitioners may disagree on the number of steps and terminology used in describing the SDLC, but most would agree that the following activities take place at various stages throughout the conceptualization and ultimate implementation of any technological system: planning, analysis, design, implementation, and maintenance. See figure 4. 1 of the text – A Typical System Development Life Cycle These activities are formally codified as a set of five distinct yet related phases: 1. Planning: The planning phase of the SDLC includes both long-range or strategic planning and short-range operational planning. 2. Analysis: It is in the analysis phase that an organization’s current capabilities are documented, new needs are identified, and the scope of an HRIS is determined. 3. Design: In the design phase, the “blueprint” for the system is finalized. (This topic is covered in detail in the next chapter. ) 4. Implementation: During the implementation, the HRIS system is built, tested, and readied for actual rollout, or the “go live”stage—the point in the SDLC where the old system is turned off and the new system is put into operation. 5. Maintenance: The SDLC does not end once the “go live” date arrives. The maintenance phase, sometimes referred to as the “forgotten phase” (Smith, 2001), is that phase in the life of an HRIS where the primary objective is to prolong the useful life of the HRIS, and it begins once the new system is put into operation. In addition, maintenance serves four main purposes: Corrective Maintenance Adaptive Maintenance Perfective Maintenance Preventative Maintenance The remaining discussion of this chapter focuses on needs analysis. Although needs analysis is important throughout the life of a project, it is particularly important early in the project—in the planning and analysis phases. ANALYSIS The analysis phase of the SDLC encompasses multiple steps, including conducting a needs analysis and the writing of a formal requirements definition report. Organizations sometimes skip over analysis, progressing directly to solutions, as people may be influenced by the marketing materials and promises made by software vendors. It is not unheard of for HR representatives, after attending trade shows and viewing potential HRIS solutions, to make a purchasing decision based on what they have seen, rather than what their organization really needs. This phase is particularly important because, unless the requirements are specified in detail, the organization cannot select the best vendor package or design their own system effectively. HRIS software is expensive, regardless of whether it is built or bought, so the investment made should be in the definitive system. When an organization does not conduct a proper needs analysis, it may expend considerable effort reworking the solution because it does not meet their needs. A proper needs analysis provides the organization with information focused on the essential areas, which is then used to document the functional system requirements. Do not underestimate the importance of the analysis. Remember, it is easier (and less expensive!) to fix a problem now before the new system is designed, rather than when it has been implemented. NEEDS ANALYSIS Essentially, the purpose of needs analysis is to collect and document information related to making changes connected to the following: Current system performance issues The introduction of a new system, application, task, or technology Any opportunities perceived to benefit the organization An effective needs analysis consists of five main stages, each of which has activities that will be discussed in detail: NEEDS ANALYSIS PLANNING OBSERVATION EXPLORATION EVALUATION REPORTING 1. NEEDS ANALYSIS PLANNING The team is assembled and prepares to investigate the current and desired system applications and functions. Once the team is in place, they can begin arranging to conduct a thorough investigation. There are four major activities that need to be completed during this stage. Organize the Needs Analysis Team The needs analysis is generally conducted by a team led by HRIS analysts and involving human resources and information technology staff. The team must work with current systems users and associated constituents and stakeholders to identify problems clearly, research possible ways of addressing the problems, and report their findings in order to support a decision on the most appropriate solutions. In addition to this core project team, a task force of constituents from the functional areas is needed to speak for the stakeholders. This group should include representatives from each area of HR, payroll, and any other areas that may use the HRIS directly. Discuss Table 4. 1, which provides a list of several common stakeholders in many large organizations. Determine Management’s Role Senior management sponsorship and a visible presence are critical to the success of the project, and mutual respect and honesty will allow the team to acquire the information needed to perform the analysis and make suitable recommendations. This group acts as a steering committee that will guide the team, resolve issues, and set priorities Define the Goals Goals give focus; they provide a standard against which performance and achievement may be measured. It is essential at this point that the team knows what it hopes to achieve, how it plans to work, and the anticipated schedule, as well as how the completed needs analysis document will look. Goals may also include timing, budget, staffing, and any other factors that could affect system selection, development, implementation, and operations. Like other goals, they should be specific, measurable, attainable, relevant, and timely (SMART) Determine Tools and Techniques to be Used Specific information-gathering tools and techniques should be used when conducting a needs analysis. The tools may run the gamut from simple paper-and-pen note taking for smaller projects through complex documentation systems for corporate-wide systems. Whatever the size of the project, it is important to choose tools that are easy to manage and allow the organization to gather the data needed to ensure that the organization can move into the design mode with accurate and timely data. 2. OBSERVATION During the observation stage, analysts impartially observe the current systems and processes, forming the basis for later recommendations. At this point, the investigation is at a high level; more detailed data will be gathered later, during the exploration stage. It is important for the analysts to interact with employees at all levels in the areas that may be affected by the changes during observation. The observation stage also consists of multiple steps: Analyze the Current Situation This activity begins by assessing the current state of HR systems and processes. Before embarking on the detailed exploration of any new system, analysts must first develop a picture of present HR operations, including any problems and issues involved in each area or function. As part of this activity, analysts must consider the existing processes and current organizational results and compare these to the organization’s expectations for what they anticipate in the future. See Figure 4. 2 – Example of Preliminary Systems Review Document Define the Needs The objective of this activity is to determine how those within HR believe their operations should occur, to evaluate industry best practices, and to begin investigating what changes or updates to the system may be valuable to adopt. The organizational policies, procedures, and standards must be considered, along with any regulatory requirements. Identify Performance Gaps Once you understand your current operating environment and have gained a strong understanding of the “ideal” operating environment, the team can conduct a gap analysis. Comparing the current situation with the desired situation allows the organization to identify and outline any performance gaps. Classify the Data Once the data has been gathered, it needs to be organized. It is important to separate the data into categories (e. g. , by function, process, and other groupings that makes sense for your environment) and to separate technical and process systems issues from other organizational issues. Determine the Priorities The team can now set the priorities for the needs that have been identified. The needs may be ranked based on scope, cost–benefit analysis, time to implement, and/or potential impact if ignored, as management will be interested in these assessments when reviewing the results of the preliminary analysis. Review With Management When presenting the preliminary findings to management, the team should be prepared to adjust priorities as requested, clarify any remaining questions, and discuss the next phase of the project in order to gain management’s continued commitment. When reviewing the analysis with management, it is important to work with them to define the task, agree on the process, state the desired outcome, and establish shared responsibility for the continuation of the project. The analysis team should also ensure that management understands that the full needs analysis takes time to design, develop, and accomplish. It is critical not to promise more than can be delivered. The analysis team should be prepared to defend the phase and educate stakeholders on what the phase entails and why it should be completed before moving forward. Ultimately, though, management’s commitment is essential to fund, staff, and support the next stage. Thus, it is important to receive formal management support and agreement (e. g. , memo, contract, etc. ) before moving forward. 3. EXPLORATION/Data Collection The exploration stage of the needs analysis process builds on the analysis completed in the observation stage and involves gathering additional and more detailed data regarding HR processes. Remember that the problems must be defined clearly before any suitable solutions may be determined. The major thrust of the exploration phase is collecting the data. There are multiple data collection techniques to consider: Interviews The goal of conducting interviews is to find representative employees that can effectively communicate the key HR practices and processes to the analysis team so that they can develop a thorough understanding of current HR operations. Interviews can be completely unstructured or very scripted. Unstructured interviews are when a general topic is introduced for discussion and the interviewer lets the interview progress naturally. In a structured interview, the interviewer asks specific questions in a predetermined order and respondents select from a set of alternative answers. See Figure 4. 3 in Text – Sample Structured Interview Script/Guide Questionnaires Questionnaires are structured data collection tools that must be designed and implemented carefully in order to obtain usable results. Before the questionnaire is implemented, the purpose and importance of each question should be determined. Employee time is valuable, and no question should be included unless it serves a clear purpose that helps the analysts better understand HR data or processes. Before launching the questionnaire to employees, the questionnaire should be tested to ensure that the questions are clear and understandable and that they are collecting the needed data. Questionnaires also have several advantages and disadvantages. For example, they can be distributed to large groups quickly and easily. In addition, questionnaires are much less time consuming than observing or interviewing employees. Questionnaires also lend themselves to easier analysis and can be more convenient for employees. Questionnaires do have shortcomings, Compared with interviews, questionnaires have much lower response rates and lack personal interaction and body cues. Observation Because observation takes place in the actual work environment, information is obtained within the context in which HR activities occur. Observation is most useful when trying to determine what employees do and in what order. Prior to observing employees in the work setting, it is important to determine the activity to be studied and to collect and review any documentation available (e. g. , mission statements, organization charts, position descriptions, current systems processes, policies, etc. ). Observation has its limitations, though. First, it is important to account for the fact that even with a well-trained and effective observer who attempts to remain unobtrusive, his or her presence alone may subtly affect how the employees go about their work. Second, observation is not as effective for high-level jobs where the process and outcome of work is not as easily seen. Focus Groups A focus group consists of a sample of people representing a larger population who gather together to discuss a topic; in this case, the topic would relate to the HRIS. Focus groups are important because they can provide as deep of information as interviews, but it has the added advantage of bringing people together, which can lead to greater and more effective information sharing than if only interviews were utilized. 4. EVALUATION Several activities occur during the evaluation stage of needs analysis. Once the data have been collected, they must be reviewed and assessed to create a clear picture of the current and desired processes, data sources, and issues. Next, the data should be arranged in a format useful for the next phase of the SDLC: design. Third, the data should be reviewed by the project team to gain additional perspective and encourage suggestions, noting any duplications or omissions. When this information is organized, it can then be prioritized according to the immediacy of need and the level of importance of the functionality the data represent. Here are samples of priority and importance ratings: Priority Description 1 Must be present at implementation 2 Must be present within 6 months of implementation 3 Nice to have but not essential 4 Not need in the near future but may be needed due to environmental changes Importance Description 1 Mandatory 2 Strongly desired 3 Nice to have 5. REPORTING The final stage of the needs analysis process, reporting, involves preparing a report that summarizes the findings and presents recommendations for the design phase. The final report should include an overview of the current systems and processes, along with a description of how a new system could address the issues and weaknesses with which the function deals. This report should contain the formalized requirements definition, the document that lists each of the prioritized requirements for the new system. The requirement definition can include specifications geared toward solving problems identified in the analysis, as well as any that focus on new functionality that HR requires in the new system. These requirements should be written in such a way that when the new system is tested, each requirement can be verified as being met. Instructor Manual for Human Resource Information Systems: Basics, Applications, and Future Directions Michael J. Kavanagh, Richard D Johnson 9781506351452, 9781483306933